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Insights and conversations on what's working and what's not


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

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Executive Summary

Introduction

Structural Issues

Three Key Trends

Traditional Structures

Centralisation

Segment-Driven Marketing

The Data Marketing Divide

The Rise Of Digital

Hub And Spoke

Bridging The Technology Gap: New Models Emerge

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The Marketing Technologist

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Case Study: Customer Reigns Supreme

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The Great Data Break-Up

13

CMO As CIO

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Content Currency And Social Selling

15

Digital Models

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CDOs: Ambassadors And Transformers

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Fostering Innovation: To Hub Or Not To Hub?

17

Era Of The Customer

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The Subscription Economy

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CMO VS CXO

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6 Steps To Restructuring Marketing

MARKETING IS BEING

CHALLENGED BY SUCCESSIVE

WAVES OF DISRUPTION

THE OVERWHELMING TREND

IN MARKETING

IS TO CENTRALISE

THE NUMBER OF CHIEF DIGITAL

OFFICERS IS ESTIMATED TO HAVE

DOUBLED IN 2014, AND WILL

AGAIN THIS YEAR

SOMEONE NEEDS

TO BE THE

CUSTOMER ADVOCATE

20

Conclusion

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

What’s emerging

is a range of

new structures

as businesses

step through

what appears to

be a transitional

phase in which

the boundaries

of marketing are

permeable rather

than permanent.

Traditional marketing team structures

are under siege from the impact of new

technologies, but while marketers know their

organisations need an overhaul, many are

struggling to formulate the new world order.

It’s no wonder: digital marketing and social

expertise, data analysis, new technology platforms

and other aspects of marketing can no longer

be contained in silos but must be disseminated

throughout organisations.

Coupled with that, boards know they must

ensure their organisations are focused on the

customer and are looking for ways to bring

marketing and IT. In many instances, a chief

digital officer is driving digital innovation

and change. In others, the customer experience

is paramount, with marketing reporting

to a chief customer or customer experience

officer. In still others, the chief marketing officer

takes in all those roles.

In the long run, as companies incorporate

better ways to engage the customer, the chief

marketing officer should emerge with a

permanently enlarged remit and greater

demand for the new, broader range of skills the

portfolio now requires.

that focus to the fore.

What’s emerging is a range of new structures

as businesses step through what appears to be

a transitional phase in which the boundaries of

marketing are permeable rather than permanent.

In some cases, marketing technologists are

being appointed to bridge the gap between

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

Traditional

structures are illsuited

to the new

landscape and the

era of the customer

/ / I N T R O D U C T I O N

Marketing, perhaps more than

any other business function, is being

challenged by successive waves of disruption.

Not only have traditional channels to

connected devices looming quickly on the horizon

as yet another disruptive challenge to be met.

In the midst of all this flux, companies are

beginning to understand that the customer’s

“ IT’S CLEAR THAT

MARKETING IS NO LONGER

A DISCRETE ENTITY”

In Brief

CMOs are

struggling with

how to draw the

new org chart

market such as mass media been disrupted,

experience of a brand is influenced by each

advertising models have become less effective

interaction it has with that person or company.

and social media has become a pervasive

And with that understanding, the remit of the

influence on customers.

marketing function is expanding.

Technology has sparked a tsunami of data from

But traditional structures, in which marketing

social and other digital channels and marketers

was a discrete department, and digital marketing

are developing ways of analysing it and using it to

expertise was often held in a silo either within

engage customers in real time, and to market

or alongside that team, are ill-suited to the new

to them over the course of the customer life cycle.

Customer segmentation is taking over

from traditional product-based marketing

models, enabled by digital channels and rapidly

landscape and the era of the customer.

The defining challenge for marketing in the

21st Century is structural, as Forbes puts it.

Questions are not only being asked about

“Marketers understand that their

organisations need an overhaul, and many

chief marketing officers are tearing up their

developing marketing techniques.

how marketing teams are structured, but about

org chart,” a Harvard Business Review report

And the pace of change is speeding up, if

how the marketing function is woven

on the study found.

anything, with the ‘Internet of Things’ era of

throughout businesses.

“It’s clear that marketing is no longer a discrete

Chief marketing officers understand that their

entity (and woe to the company whose marketing

THE DEFINING

CHALLENGE FOR

MARKETING IN THE

21ST CENTURY IS

STRUCTURAL”

FORBES

organisations need a rethink, but most are still

struggling to understand what the new world order

should be, according to the Marketing2020 study

conducted by the US Association of National

Advertisers, the World Federation of Advertisers

and research firm Millward Brown Vermeer.

is still siloed) but now extends throughout the

firm, tapping virtually every function.”

But CMOs are struggling with how to draw the

new org chart.

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

T R A D I T I O N A L

STRUCTURES

“Marketing is becoming far more of a strategic

influencer to the organisation. If you’re a chief

In Brief

As companies

become more

customer-centric

versus productcentric,

they need

to start breaking

down their

functional silos

There are a few trends at play here,” says

Tien Tzuo former chief marketing officer

of Salesforce.com and founder of US-based

subscription service provider Zuora.

The second trend is that within the marketing

domain, there is also a breaking down of silos.

“It used to be that public relations, brand,

product marketing, demand generation and

In big enterprises with a number of business

units, marketing has traditionally been

decentralised, or aligned to those business units.

That means each business unit, usually organised

around a company’s product, has often had its own

marketing team, with many of the core functions –

executive and you don’t think it’s necessary to

have marketing at the executive table I would be

saying, ‘I need to transform my marketing’,”

she says.

“It needs to become more of an ‘intelligence

agent’ for the organisation – not just the

production house.”

Marketing needs

to become more

of an ‘intelligence

agent’ – not just the

production house

field marketing could all do their own thing,”

brand, public relations, social – included.

“It’s about how can the marketing organisation

“The first is that as companies become more

Tzuo says. “But now it all blurs — the content

“It’s incredibly frustrating to see where marketing

impart that to the broader group, being more of an

customer-centric versus product-centric, they

that public relations drives is used by demand

is decentralised to align it to these silos,” Australian

influencer and being more connected with all parts

need to start breaking down their functional

generation, and the messages are created by

Marketing Institute president and founder of Asia

of the organisation. There’s also this

silos to present a single view of the company

product marketing, and it all needs to be unified

Pacific marketing consultancy TrinityP3 Darren

sense of embedding marketing

to the customer.

under one brand and one corporate identity.”

Woolley says.

into the business.”

“As a result, there needs to be much more

“It’s not customer-centric to see your organisation

interaction between marketing and sales, between

The third trend, according to Tzuo, is

structured around your products and services and

marketing and product, between marketing and

that marketing is now a “data-intensive and

then have your marketing function decentralised so

customer service, and so on.

technology-enabled function”, demanding new

marketing is engaging with your customers solely

“In a business-to-business company, this

skills sets of the chief marketing officer.

on that basis.”

sometimes means combining marketing and

All of which begs the question: how are

But things are changing.

sales under one chief. In a business-to-consumer

companies planning for the changed

“There is a lot more of a shift to organise

company, this sometimes means combining

expectations of customers, and where do

around customer segments, and then the

marketing and product (or technology) under

marketing, new technologies and data sit

lifecycle of the customer,” says Deloitte

one chief.”

within those plans?

Australia partner and head of customer strategy

and insight, Jenny Wilson.

“IT’S NOT CUSTOMER-CENTRIC TO SEE YOUR

ORGANISATION STRUCTURED AROUND YOUR

PRODUCTS AND SERVICES AND THEN HAVE

MARKETING ENGAGE WITH YOUR

CUSTOMERS SOLELY ON THAT BASIS.”

DARREN WOOLLEY

Founder / TrinityP3

@darrenP3

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

The overwhelming

CENTRALISATION

trend in marketing

is to centralise

The overwhelming trend in marketing is

to centralise. In a traditional matrix structure,

a centralised team performs brand marketing and

traditional advertising functions,

CONSUMER

INSIGHTS

CMO

with digital and research, or data, servicing the

various business units.

The CMO sits at the top of that central marketing

department, with different silos, such as brand,

retail, direct, public relations and paid media

BRAND

VP+DIRECTORS

COMMS

VP+DIRECTORS

DIGITAL

VP+DIRECTORS

advertising -- and their supporting agencies -

reporting to him or her.

“This model is so pervasive it feels innate,”

says Marko Muellner, digital vice-president group

director of Edelman Portland.

MEDIA

PLANNERS

RETAIL

MARKETING

BRAND

MANAGERS

PR

MANAGERS

PRODUCERS

SEARCH

MEDIA

PLANNERS

“But, like all other organisational structures,

it was engineered long ago based on quickly

dissolving assumptions about customers and

the marketplace.”

Increasingly, newer structures that start with the

BRAND

MANAGERS

PR

MANAGERS

SOCIAL ANALYTICS EMAIL

customer are being implemented.

AGENCIES

A TRADITIONAL MARKETING TEAM STRUCTURE

Source: ClickZ

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION

2015

In Brief

In this model, teams

are not grouped

by marketing

discipline and

channel but

according to

their role in

moving customers

through the

purchase funnel

MARKETING

Companies going down the segment-driven marketing

road set up teams that are the custodians of defined

customer segments, Deloitte’s Jenny Wilson says.

“Rather than having a mentality of ‘we market a product,’

they are trying to start with an understanding of the

customer, and how they then market an experience to

that customer, and therefore what does it mean to market

products to that customer,” she says.

In a segment-driven model, marketing projects should be

initiated by the consumer insights team, which should work

closely with senior leadership to ensure marketing activity

meets corporate objectives.

“Everything from new products to developing a Super Bowl

The model has several benefits: all divisions are aligned

by segment, objective, keywords, publications, and so on,

because they are all working from the same insights and

target audiences.

Agencies fit more seamlessly into this model, filling

key roles where needed, such as providing media buying

services or public relations as part of the ‘Reach’ team.

“New consumer insights or performance optimisations or

real-time content opportunities can arise and the teams are

fully equipped to handle them. The content team can make

a funny tweet and the community managers and paid social

teams are ready to go because they already know the key

segments,” Muellner says.

Management teams need to be both the voice of the

customer and accountable for influencing customer

behaviour, he adds.

Segment-driven models with the customer experience

at their heart are better able to cope with consumers’

increasing reliance on their network and social media

for recommendations, and the ensuing need for brands to

be able to market to them over their full life-cycle.

campaign starts by asking, ‘Who are we trying to engage?’,”

Muellner says.

In this model, teams are not grouped by marketing

discipline and channel.

Rather, they’re organised according to their role in moving

customers through the purchase funnel, from awareness

and consideration to exploration and purchase.

CUSTOMER

EXPERIENCE

“Consumers will rely on their connected network 70 per

cent more than on a brand,” Wilson says. “Even if I don’t

know you, that only drops to 50 per cent.”

“Marketing throughout the end-to-end life cycle of a

customer becomes much more important because

they are relying more on word-of-mouth from a peer.

Servicing existing customers becomes paramount.

A CUSTOMER-CENTRIC MARKETING STRUCTURE

Source: ClickZ

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

Only two in five

marketers

control their

company’s

customer data

T H E

DATA

Where data and analytics need to sit in

relation to marketing is often less clear.

Only two in five marketers (43 per cent) control their

company’s customer data, according to a recent

study in Britain, although that figure has increased

In Brief

You don’t get a

marketing brief that

doesn’t have a big

digital component

from one in three (34 per cent) two years ago.

Almost all (92 per cent) say integrating data

across teams will improve the customer experience.

THE RISE

But there is a growing recognition that marketing

structures of the future will be more agile,

with a test-and-learn mindset that begins with

customer segmentation.

Analytics will be used to help determine the

best customer experience, that experience will be

designed from end to end, and implemented by a

cross-functional marketing team, which will act on

new learnings quickly.

“Agility is built into the model,” Muellner

says. “New consumer insights or performance

optimisations or real-time content opportunities

can arise and the teams are fully equipped to

handle them.”

When few outside the ‘cool kids’

understood marketing via digital

channels, it was often a silo within marketing,

within IT, or on its own.

Until as recently as 12 months ago, many

companies still had a centralised digital team

that in some cases was separate from the rest

of the marketing department.

That has changed rapidly over the past year,

according to Perceptor managing director and

specialist digital marketing and sales recruiter

Mark O’Connor.

More than 40 per cent of budgets are now

spent on digital marketing – much more in

have integrated digital marketing into their core

marketing function, O’Connor says.

“Digital is no longer the ‘nice to have’ adjunct

that it was – it is now either a key strategic

channel within a business or it is being absorbed

by the business as part of ongoing change

or transformation.

“I’m not sure if digital is getting absorbed

by marketing or it’s taking over – probably the

latter,” O’Connor says.

“All roles are going to have such a strong digital

element that the exception will be the non-digital

roles. You don’t get any marketing brief that

doesn’t have a big digital component.”

some cases – and digital expertise is

MARKETING

DIVIDE

proliferating. Many more people throughout

companies need an understanding of social, data

and digital marketing techniques than

just the marketing team.

In the past 12 months, there has been

a maturing of the market as organisations

“I’M NOT SURE IF DIGITAL

IS GETTING ABSORBED BY

MARKETING OR IT’S TAKING

OVER – PROBABLY THE LATTER”

MARK O’CONNOR

Managing Director / Perceptor

mark@perceptor.com.au

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

/ / B R I D G I N G T H E T E C H N O L O G Y G A P

In Brief

In this model,

product marketing

managers connect

MODELS EMERGE

A CMO must be

in charge of the

technology

business units

budget

with a centralised

marketing

department

M

ore than four in five marketers

(84 per cent) in a recent global study say

where when a dollar goes in, you can easily

measure a dollar out, or your return on

“If marketing’s not embracing technology,

it’s going to fall behind,” he says. “It needs to

turning marketing and IT into strategic partners

investment,” Fuller says.

have technology as one of the centrepieces of

is vital if they are to maximise the return on their

“What is defined as a CMO is starting to

how it’s working across an organisation.”

Structurally, the marketing pendulum has “swung from

decentralised to centralised, and now hub and spoke”,

says Wilson. In this model, product marketing managers connect

business units with a centralised marketing department housing

all the core marketing services.

"The extent of what you mirror in the spoke from the hub comes

down very much to the size and makeup of each organisation,"

Wilson says.

"As to what is in the hub, certainly the overall marketing and

marketing technology investments.

Kobie Fuller, a member of the investment team

at US venture capital firm Accel Partners (whose

investments include 99designs, Atlassian,

Dropbox, Facebook and Spotify) and himself a

former chief marketing officer of online clothing

retailer Revolve, goes further.

“We have now emerged into a world where

things are super-quantifiable,

change. Having someone who can understand

and can appropriately manage a marketing

budget with a quantitative bent to it is where

things are headed.

“A CMO has to be in charge of the marketing

tech budget,” Fuller adds. “That’s a very

troublesome dynamic if there are other key

stakeholders influencing how they do their job.

A number of different models are developing

as companies come to grips with new

technologies, and look for ways of enacting

digital transformation, championing innovation

and becoming a data-led marketing business.

segmentation strategy, and then centre of excellence in

customer experience, customer analytics and insights and

overall brand. Then if there are sub-brands sitting at a business

function level, these can be supported in the spoke.

"Campaign management and execution is best driven as a

shared service support, along with social and digital marketing.

"The spoke can mirror elements of this.

"What is key is that the hub drive the vision, strategy and overall

capability development for marketing.

Formal collaboration processes and establishing a

“collaboration ecosystem” become really important, she

says, along with the right governance model.

“WE HAVE NOW EMERGED INTO A WORLD

WHERE THINGS ARE

SUPER-QUANTIFIABLE,”

KOBIE FULLER

Investment Partner / Accel Partners

@kobiefuller

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

That’s the

challenge – take

the budget we’re

allocated and

articulate the return

on investment

“We have a focus on using actionable

insights for marketing and working with our

chief analytics office on advanced and predictive

analytical models. I think everybody has a

business intelligence unit.

“Companies with data analysts who mine the

data and come up with automated campaigns

that can deliver tailored one-to-one propositions

that are relevant and will add value to people’s

lives when their next buying decision is made

are going to be the companies that

are successful.”

Pattison says IAG Commercial uses a

While Pattison’s marketing technology work

remains largely within the channel marketing

division, targeting specific industries, brand

marketing is separate.

“I’d say we’re in the early days,”

he says. “We just ticked past operational

mastery. We’ve established capabilities for

each channel. We’ve defined a road map.

Marketing technology is an emerging function.

It’s very early days.

“There’s a lot more work for us to do to show

the value to our executives,” he says.

“That’s the challenge – take the budget we’re

TECHNOLOGIST

three-step customer and partner experience

process: customer insights and research look

for opportunities for the company to put a

allocated and articulate the return on investment

that you’re getting through the various channels.

“Until we can do that, marketing is going to

A

relatively small number of Australian

corporations have appointed a marketing

technologist to help bridge the gap between

marketing and IT, helping the company to gather

and act on insights from the data it captures, and

many of the same functions as a chief

digital officer, they arguably have a closer

understanding of what new technology platforms

can achieve in marketing and business

growth terms.

viable proposition into the market. A product is

designed and priced within IAG Commercial’s

underwriting area.

“Then it comes to marketing technology to

execute,” he says.

struggle to stand out from the other departments

asking for additional money and attention.”

get the most out of the marketing technology

“My role came about because of the

stack it is building. Last year, Grant Pattison

challenge the business has translating

was appointed senior manager, marketing

and sales technology working mostly in the

commercial, business-to-business arm of

Insurance Australia Group.

While marketing technologists may perform

strategy into technology (and vice versa),”

Pattison says.

“Those organisations that can leverage their

data better than other organisations are going to

be the winners,” he predicts.

THOSE ORGANISATIONS

THAT CAN LEVERAGE THEIR

DATA BETTER THAN OTHER

ORGANISATIONS ARE GOING

TO BE THE WINNERS”

GRANT PATTISON

Senior Manager, Marketing &

Sales Technology / IAG Commercial

@grant_pattison

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION

In Brief

The big thing has

been bringing what

are two disparate

things (marketing

and technology)

together

Customer Reigns Supreme

Aussie’s Richard Burns:

GM CUSTOMER EXPERIENCE AND TECHNOLOGY

Mortgage broker Aussie is elevating customer experience

above marketing, technology and data.

@Aussie

It’s a great challenge,” says Aussie’s

Richard Burns, of his role as head of

marketing and digital presence, IT, customer

retention and data, and project management for

the mortgage broker.

“It’s a very different remit than just about any

other role that I’ve seen.”

He recently renamed his department Customer

Experience and Technology.

“The big thing has been bringing what are two

disparate things (marketing and technology)

together,” says Burns, who was head of

customer experience for online share trading

platform CommSec before he joined Aussie

in February.

One of the ways Burns has moved the teams

closer together culturally is by having them use

common workflow processes in recent months.

"It's really just having the marketing teams

adopting some of the more agile methodologies

used by technology companies," Burns says.

"It aids collaboration."

“We all work as one team.”Aussie founder John

Symond said in January Burns would be charged

with growing the Aussie brand, improving its

effectiveness in digital channels and leading the

company’s adoption of innovative technology.

“The reasons it was created were to

ensure the team was much more focused

on the customer and also where the industry

is going in terms of digital disruption,”

Burns says.

“There was a strong sense that marketing

technology is going to be part of our future.”

Aussie operates an internally developed

customer relationship management system

and Burns is looking at bringing to the fore

more detailed information about the end-to-end

customer journey from that system, as well as

building out the company’s marketing

technology stack.

“We collect a lot of data about our customers’

journey but we don’t put it together in a cohesive

way,” Burns says.

But he says while the team is on a digital

journey, it is also on a “physical journey” to

ensure customers have a seamless transition

from seeing traditional and online marketing to

visiting the company’s website, and then meeting

an Aussie mortgage broker in stores or in the

customers’ own homes.

“Our primary purpose for being here is all about

the customer,” he says.

“I’ve been ensuring each member of our team

spends time out in the field with our brokers.

“At CommSec, customers would never see the

team face-to-face,” Burns says. “That’s one of

the strengths of the Aussie experience. You’re

speaking directly with an expert.”

Within the larger team of about 60, there are

more traditional marketing structures covering

customer relationship management, advertising

and brand and online but Burns says digital

marketing is part of everyone’s role.

“We don’t have a digital marketing team,” he

says. “We have a marketing team.”

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011


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

It’s fairly common

to break data

out from marketing

Consumer goods companies also often

separate brand, innovation and digital from the

“It’s fairly common to break it up in some way

but it’s not very effective,” Woolley says.

in some way

but it’s not

very effective

Cocoa Cola’s Interactive Signage

research, or data, function, which is instead

aligned with product categories.

Brewer Lion last month split chief marketing

officer Matt Tapper’s role, following his

promotion to chief executive of the

international division. The company grouped

brand and innovation together, encompassing

digital, sponsorship and experiential. Planning

“It’s becoming less and less so because so

much data is available to you on customer

behaviour through things like your (programmatic

digital media) trading desk.”

(data) was grouped with product category.

“Consumer goods companies put digital in

the communications area because they see it

as a channel,” TrinityP3’s Woolley says.

“But they put data with product because that’s

where they want to get customer insights.

Retailer Myer has just announced the

appointment of Mark Cripsey to the newly

created role of chief digital and data officer.

That combination of digital and data “reflects

Myer’s increasing emphasis on omnichannel

retailing, and on the importance of customer

data”, according to the company.

In Myer’s case, the executive management

team now includes a chief transformation officer,

a head of human resources, safety and risk, the

chief financial officer, chief merchandise and

marketing officer Daniel Bracken and Cripsey,

heading up digital and data.

IT and retail technology, along with new

mobile and connected devices such as beacons

– that are in time expected to revolutionise

retail marketing – are part of Cripsey’s domain,

along with the analytics supporting the Myer One

loyalty program.

“They are separate (from marketing) but the two

divisions obviously work pretty hand-in-hand,”

Myer says.

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THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

“By flipping the funnel and starting with the

ideal customer profile first, teams are able to get

New technology

firms are more

likely to give CMOs

a lot more precise about how they deploy spend

and approach demand generation.

permission to set up

their own marketing

technology stack

CMO as

“One-to-many customer marketing … will

often roll up to customer success rather than

marketing,” Kennada says.

According to Accenture, CMOs don’t

think much of their traditional CIO

technology counterparts. Thirty-eight per cent of

“Digital firms may be the early adopters of the

trend as they have a propensity to purchase

licences of back office software-as-a-service

and feel about your solutions,” Kennada says.

“Companies that are able to make

sense of this data in aggregate have a leg up on

“A lot of companies are hiring someone

responsible for leveraging technology to drive

product adoption behaviour at scale… This role

them think IT keeps them out of the loop, and 35

without requiring IT approval,” Kennada says.

understanding the context behind each customer

can help ensure that users are getting value from

per cent think marketing concerns aren’t a high

“This shift leads to bigger budgets,

and predicting future behaviours.”

the product or service, and are ultimately able

enough priority, according to a report in

and ultimately, more hiring in marketing to

This has led to the rise of account based

to renew, buy more products, or advocate to

Wired magazine. “The disdain is mutual, with

support the various services that don’t require

marketing, and one-to-many customer marketing,

their networks.”

31 percent of CIOs saying their marketing

the heavy infrastructure. This has brought a new

Kennada says.

peers are ill-informed about tech,and 36

level of data-oriented transparency into how

“Marketing teams are benefiting greatly from

percent steamed because marketing routinely

marketing is influencing the customer experience

predictive tools that are able to build target lists

bypasses them for solutions.”

throughout their journey.”

based on customer data and then score leads in

New technology firms are more likely to give

Kennada says the Internet of Things has

order to prioritise follow-up,” he says.

CMOs permission to set up their own marketing

created a “data explosion” which puts companies

Resources that may have been spent on paid

technology stack, according to Anthony Kennada,

that are thinking about customer success in a

search advertising, for example, can be allocated

vice-president of marketing for US-headquartered

better position to prepare for this disruption than

to drive interest from a target list of customers

customer success technology firm Gainsight.

ever before. It’s an area in which Gainsight,

with a high probability of conversion.

Kennada says the ‘chief marketing officer

which helps companies measure the health of

as the new chief information officer’ trend is

“driving change to how marketing teams are

being structured”.

their customer relationships, specialises.

“Your customers are leaving a digital

breadcrumb trail online about how they work


YOUR CUSTOMERS ARE LEAVING

A DIGITAL BREADCRUMB TRAIL

ONLINE ABOUT HOW THEY WORK AND

FEEL ABOUT YOUR SOLUTIONS”

ANTHONY KENNADA

VP Marketing /

Gainsight

@akennada

013 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

CONTENT CURRENCY AND

Sales and

marketing are now

inextricably linked

Sales and marketing are now inextricably

linked due to the ability of marketers to

distribute their own content to customers over

social media via content marketing.

According to US-based social selling evangelist

Jill Rowley, the new sales model uses social

channels to build digital rapport, using content

provided by marketing.

Two-thirds of purchase decisions are completed

before people even talk to a sales person,

according to the Corporate Executive Board.

“Content is the currency of the modern

sales professional,” Rowley says. “Social selling

is using social networks to do research to be

relevant to build relationships that drive revenue.”

“It’s a way to be relevant, to build relationships

that drive revenue, customer lifetime value,

and advocacy.

“It’s not about fans and followers, likes and

retweets, clicks and favourites and shares,”

she says. “It’s about pipeline and revenue.

“You are using social media to

gather information. Your objective is to learn

about your buyers and their sphere of influence.

You are listening, not talking. You need to listen

at an industry level, a topic level, a company level

and a personal level.

“You need to look through (your buyers’) eyes

to understand their agenda, to synch up with

their priorities and then to watch for opportunities

to be of service.”

She says at first sales people may simply be

sharing insights and their own content marketing.

“But eventually, with buyers who can truly

benefit from what you have to sell, you will spot

an opportunity to point out exactly how they can

benefit from your offerings.”

JILL ROWLEY

Social Selling Evangelist

@jill_rowley

“YOU NEED TO LOOK THROUGH (YOUR BUYERS’)

EYES TO UNDERSTAND THEIR AGENDA, TO SYNCH

UP WITH THEIR PRIORITIES AND THEN TO WATCH

FOR OPPORTUNITIES TO BE OF SERVICE.”

014 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION

2015

In Brief

Technology firms

tend to be very

acquisition-focused

DIGITAL

MODELS

Inbound marketing platform HubSpot

last year collated a series of marketing

organisational charts from a number of US firms,

many of them digital, including software makers

Atlassian and ZenDesk, software building

platform GitHub and online shopping service

Rue La La.

It found each had a different marketing

structure, focused on elements such as:

Elasticity, to allow for rapid growth,

Top-of-funnel growth, in which content

marketing was the biggest team

Inbound, with large demand-generation,

persona-based, ‘buzz’ creation and

content teams

Funnel, with separate public relations and field

marketing/demand-generation teams, and

in one case a strong focus on the end of the

funnel, or customer retention

Culture, with a very flat structure, and;

Creative, with a heavy emphasis on content,

design and merchandising.

“Technology firms tend to be very acquisitionfocused,”

says TrinityP3’s Darren Woolley.

“But there is no one-size marketing structure to suit

all. There are increasingly variations on a theme.

“If anything it is easier for these new companies

to develop more flexible models than it is for

traditional companies to change to a more flexible

and responsive structure.”

“It’s all about the inbound movement

and about content,” HubSpot Asia Pacific

marketing director Ryan Bonnici says. “As well as

acquisition, if your product is digital you should

also focus on customer retention, which you can

service in a different way.

“CMOs have so much more power now

because they can prove their value in the

business. Your blog is no longer just a thought

leadership piece. It’s also a business driver.

The marketer you’re looking for is a three-way

split between being data-oriented with a content

background and then a growth mindset.”

CDOs:

Ambassadors And

Transformers

Chief digital officers are becoming relatively

common, particularly in industries

such as traditional media, in which they are

often expected to build digital expertise and

revenues, promote the adoption of digital media

channels and act as something of a digital

transformation officer.

According to London-based research

firm Econsultancy, there is a lot of change

in Britain both within companies and across

sectors, but the number of CDOs is estimated

to have doubled during 2014 and is forecast to

double again this year.

There are two types of CDO, according to

Econsultancy founder Ashley Friedlein, who

hypothesises one type – the Ambassador CDO

-- has little P&L responsibility but is the digital

evangelist in companies, inspiring, educating

and informing on all things digital.

The other – the Transformer CDO –

“has real power and is set on transforming

“The remit of a transformer CDO is typically

broader than a CMO,” Friedlein says. “The CDO

has a more complete view of the customer

experience across touchpoints beyond

just marketing to include sales and service.

The CDO often controls product as well as

marketing. In fact the transformer CDO is almost

synonymous with a Chief Customer Officer.”

Gartner has predicted one in four businesses

will have a CDO by this year.

“For now, CDOs are seen as the people

who can step in to fill gaps and deficiencies

regarding digital capabilities while also bridging

the gap between the marketing and technology,”

Econsultancy senior researcher Sean Donnelly

says. “We certainly think that the CDO role is

something that marketers can take up.”

In Brief

One in four

businesses are

tipped to have a

CDO by this year

THE MARKETER YOU’RE LOOKING FOR IS A THREE-WAY

SPLIT BETWEEN BEING DATA-ORIENTED WITH A CONTENT

BACKGROUND AND THEN A GROWTH MINDSET.”

RYAN BONNICI

HubSpot

Marketing Director

@ryanbonnici

the entire business on their journey to

becoming CEO”.

015 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION

2015

IN FOCUS

In Brief

Businesses are

increasingly

looking to physical

innovation centres

to leverage the

innovations led

by startups

Many of the world's biggest companies are establishing innovation

labs in discrete physical hubs. But how involved should marketing

be in driving change?

Almost four in ten of the world’s 200 biggest

companies are experimenting with housing

technologically driven innovation in a discrete ‘lab’,

often physically located in a global tech hub.

Telstra is one of a number of big Australian firms

partnering with third parties as one way of accelerating

innovation. It has launched a technology accelerator,

Muru-D, in several cities, as well as an innovation lab,

Gurrowa, to help it develop and adapt to experimental

new technologies.

IAG in July launched IAG Labs, responsible for

“driving digital and innovation across IAG and its

brands”, led by its chief digital officer Peter Harmer.

IAG Labs aims to bring together existing technology

and project management teams with “a new customer

insights capability, a centralised digital product

and service development team and a venturing unit

focused on new business opportunities and

disruptive technology”.

“This is an exciting opportunity for IAG to be more

strategic, agile and innovative in how we deliver to our

customers as we build this new division,” Harmer says.

Consumer goods firm Mondelez – owner of the

Cadbury, Kraft and Vegemite brands in Australia –

has taken a slightly different strategy, keeping the

experiments closer to home.

Last year it launched the Mobile Futures technology

innovation program that saw it partner five of its

brands with five tech startups as a way of accelerating

innovation and fast-tracking the understanding of mobile

technologies within the company.

This year, the Media Innovators program will see nine

of Mondelez’s digital brand teams compete for a share

of a million-dollar advertising budget earmarked

for digital innovations.

According to the Innovation Game report released

by Altimeter Group and Capgemini Consulting in

July, businesses are increasingly looking to physical

innovation centres to leverage the advances led by

startups, most commonly focusing on mobility

and big data.

But the report found too many organisations were

using these centres in isolation and not bringing the

innovative thinking necessary to digital transformation

into internal teams. Ultimately, 80-90 per cent of the

centres failed. “A more equal balance between external

and internal thinking is required,” the report found.

According to Andy Lark, global chief marketing officer

of Xero and chairman of Simple, marketers should be

the agents of change within companies.

“One of the core functions of a modern marketer

is managing change,” he told the recent Marketo

Marketing Nation event in Sydney. “You have to be

the change agents.”

He said marketers should “burn” their budget every

few years and start again, reallocating funds to the

new world.

“It involves breaking up with agencies, breaking up

with contractors, but as soon as you get in the habit of

doing it every two years, you’ll start to see the benefits

of reallocating your budget to channels that work.”

Accel Partners’ Kobie Fuller sounds a note of caution

to marketers thinking about embracing “experimental

technologies” such as virtual reality, the Internet of

Things and beacon technologies, however.

He says they should resist the temptation to do so until

their traditional channels are saturated. Using marketing

funds “to do science experiments” is a risky business,

Fuller says.

“ ONE OF THE CORE

FUNCTIONS OF A MODERN

MARKETER IS MANAGING CHANGE.

YOU HAVE TO BE THE

CHANGE AGENTS”

ANDY LARK

Chief Marketing Officer

Xero

@kiwilark

016

simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

Customer

engagement is

tipped to overtake

productivity gains

as the chief driver of

business growth

ERA OF

THE CUSTOMER

The concept of the customer experience

is “strongly trending” - just as content

marketing was trending last year, according to

Econsultancy’s Singapore-based Asia Pacific

chief Jefrey Gomez.

It’s an emerging area of expertise: less than

900 people on LinkedIn identify themselves

as chief customer officers, and less than 100

as chief customer experience officers, Sean

Donnelly says.

And they are not always marketers.

“People come from various departments, such

as customer service … and operations,” Gomez

says. “Managing all the digital touch points a

customer has with a brand has become a big

part of customer experience.”

In fact, customer consultancy Bluewolf warns that

if marketing cannot evolve to encompass the full

customer experience, the reverse will happen.

Four out of five respondents to an international

Bluewolf survey conducted last year

predicted customer engagement would overtake

productivity gains as the chief driver of

business growth.

“Consumers are using their voice to drive

change in product development and also

influencing other consumers and customers,”

then-Bluewolf APAC chief Arlene Wherrett said.

“The CMO needs to be more

customer-obsessed, thinking about how

customers want to interact with products and

services. The chief marketing officer needs to

evolve to be the chief customer officer.”

Home loan provider Aussie appointed

former CommSec general manager, customer

experience Richard Burns to the role of

general manager of customer early this year,

with responsibility for digital, marketing and

THE CMO NEEDS TO BE MORE CUSTOMER-OBSESSED,

THINKING ABOUT HOW CUSTOMERS WANT TO INTERACT

WITH PRODUCTS AND SERVICES”

ARLENE WHERRETT, BLUEWOLF

technology (see interview, page 11).

“As a member of the executive management

team, Richard will be responsible for protecting

and growing the Aussie brand while at the same

time strengthening our digital effectiveness and

presence with innovative technology,” Aussie

founder and executive chairman John Symond

said at the time.

In Britain, retailer John Lewis has

just promoted marketing director

Craig Inglis to customer director, putting him in

charge of the end-to-end customer experience,

as well as marketing and customer insight.

Taking a slightly different approach, British

Airways has appointed Troy Warfield as director

of customer experience, in charge of the British

Airways brand, customer experience,

in-flight service, customer insight, customer

relations, product development and partner

activity. He will work alongside chief

commercial officer Andrew Crawley, who retains

responsibility for other marketing activity.

But Australian telco Telstra is probably one

of the early poster-children for a customer-led

marketing transformation after famously ramping

up its spending on its customer relationship

management and one-to-one marketing about

three years ago.

The company underwent a transformation

that saw it put the customer experience at

the its centre, led by then-chief executive

David Thodey. It has become a technologydriven

marketing organisation that can provide

personalised, relevant messages to its

customers based on Telstra’s analysis of how

they feel about the company.

In 2013 Telstra increased its data-driven

marketing spend to 20 per cent of its budget,

almost a seven-fold increase compared with two

years earlier, and created a virtual marketing

technology unit with IT staff to bridge the gap

between marketing and technology.

Under then-director of one-to-one marketing

Nick Adams, who now heads up ‘marketing

enablement’, the company also launched a new

type of loyalty program that, rather than give

points, offers movie tickets and money-can’t-buy

experiences to customers.

017 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

In Brief

The whole world

Marketers must

is moving towards

evolve to become

a subscription

economy

The customer era is already evolving into

the age of the subscriber, where rather

than buy products outright, people will buy

outcomes and pay only for what they use,

according to Zuora.

Founder Tien Tzuo cites innovative examples

such as GE selling air miles instead of

jet engines, and tractor companies selling metric

tonnes of earth moved instead of bulldozers.

“The whole world is moving towards a

subscription economy,” says Tzuo.

“Beer manufacturers are saying, ‘Can I put

a Wifi-connected keg in your house, and

whenever the beer gets low I’ll make sure I send

a refill and I’ll charge you by how many pints of

beer you drink,” Tzuo says.

“What if photocopier makers charge people for

paper – not the photocopier.

“You wind up with more loyal customers and

a better margin and people will pay extra

margin for that flexibility,” Tien says.

“Maybe I’ll sell you more office supplies while

I’m reloading your paper because I know you’re

low on paper.

He says the subscription economy is also having

an impact on the shape of marketing departments.

“The key to success in the subscription

economy is to wrap the entire company around

the subscriber.

“In the old world, we created functional silos

to create product. You designed the product,

you made it, you sold it, you served it, and every

department was relatively independent.

“But in the subscription economy, where it’s

about creating a subscription experience, all that

changes. Marketing needs to take a stronger

role in unifying the organisation around

the subscriber experience.”

Ultimately, Deloitte’s Jenny Wilson warns that while marketers

have traditionally worked to sell products and services to

customers, they must evolve to become customer advocates or risk

being overlooked at the executive table.

“Look at the magnitude of change consumers are going to face – data

is being collected about the consumer and we don’t even know it’s

happening,” Wilson says. “Someone has to be the customer advocate.

“Words like campaign need to be conversation. Advertising

changes to advocacy. It’s not product marketing it’s about

experience marketing.

“If not, it’ll be the customer experience officer sitting at the table

with the CEO, not the chief marketing officer.”

But Zuora’s Tien Tzuo says chief digital and chief customer

executive roles represent “a point in time”.

“If everything’s digital why do you need a chief digital officer?”

Tzuo says. “The next phase is why do I need a chief customer officer?

“If anybody’s the chief customer officer, it better be the CEO.

“Your software companies will come up with a customer success

executive – and we have one – but everybody’s got to be dedicated

to customer success.

“It’s a transitional phase. It’s not a long-term thing. There’s a craft

of marketing, there’s a craft of sales. The customer? I don’t

customer advocates

know what that craft is.”

018 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

One in three

marketers believe

the need for

STEPS

3. Assess the current process

against the broader business

strategy and marketing goals

6. Communicate why the

change is necessary and

inspire stakeholders to get

on board

change is

already urgent

Align the process so it delivers on the bigger

corporate strategy as well as marketing

“The change from a capability perspective is

objectives and pinpoint the areas in which it

daunting for many and not insignificant,” Wilson

Four in five marketers believe marketing

teams must be restructured some time in

the next five years, according to a survey from

The Economist Intelligence Unit.

One in three believe the need for change is

already urgent. But few are confident about

tackling the process.

Here are six steps companies and marketers can

take to restructure marketing:

1. Analyse the market

Understanding the bigger-picture

dynamics of change in the market is crucial to

developing a flexible, forward-looking structure.

“Understand what is taking shape in the market and

use this to inform a transformational aspiration,”

Deloitte’s Jenny Wilson says.

does not measure up. “Look for bottlenecks,

duplication of processes, gaps and confused

responsibilities,” says Woolley.

4. Design models that align the

new marketing structure to

the business strategy

Select the model. Cultural fit and sensitivities

of different parts of the business come into play

when designing and selecting the new

adds. “The narrative for inspiring change and the

disciplined communication for engaging is key

both across stakeholders and for the team.”

“UNDERSTAND WHAT IS

TAKING SHAPE IN MARKET

AND USE THIS TO

INFORM A

TRANSFORMATIONAL

ASPIRATION”

2. Define the current process

in detail

marketing structure.

Your current marketing procedures should be

5. Map the transition process

mapped to a very granular level, according to

Trinity P3’s Darren Woolley. “Many company

executives believe they know this and so overlook

this step only to discover overlooked requirements

in the middle of the transformation,” he warns.

Use the current process and future process to

map the transition from one to the other. “The

transformation journey should include an agile

and iterative approach to change,” Wilson says.

This process should include interviews with key

internal client stakeholders to ensure needs

that aren’t being met in the current process are

accommodated, Wilson adds.

JENNY WILSON

Head of Customer Strategy & Insight

Deloitte Australia

@JennyWilsonDA

019 simplehq.co contact@simplehq.com.au +61 7 3253 3400


THE CHANGING STRUCTURE OF MARKETING IN THE AGE OF DISRUPTION 2015

In Brief

No one-size-fits-all

structural model

has emerged

//CONCLUSION

Marketing teams have evolved in most cases

to absorb digital marketing capabilities and

But it’s clear marketers feel customer data

and marketing technology should come under their

operating looks set for a relatively short shelf life;

businesses must also evolve internal structures

are moving inexorably towards incorporating new

remit and as the skill sets of chief marketing officers

to take better account of disruptive new

marketing and advertising technology platforms.

evolve to be include more analytical and technological

digital technologies.

In some cases, companies employ a marketing

skills, this is increasingly likely to be the case.

In an ideal world, the chief marketing officer will

technologist to form a bridge between marketing

The rise of customer executives may be a

emerge with a permanently enlarged area

and technology. In others, digital innovation officers

transitional phase as businesses re-orient themselves

of responsibility, greater demand for the new,

head up a separate unit. In still others, marketing,

to cope with a renewed emphasis on fostering

broader range of skills the portfolio now requires –

technology and data are united under a customer

customer engagement.

and one foot permanently in the developing

experience officer. No one-size-fits-all structural

Similarly, the rise of separate innovation labs to

technology space.

model has emerged.

develop new technologies and a more agile way of

IF EVERYTHING’S DIGITAL WHY DO YOU

NEED A CHIEF DIGITAL OFFICER? THE

NEXT PHASE IS WHY DO I NEED A CHIEF

CUSTOMER OFFICER?”

TIEN TZUO

CEO

Zuora

@tientzuo

020 simplehq.co contact@simplehq.com.au +61 7 3253 3400

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